The future of behavioral economics lies in analyzing massive, real-world datasets, a major shift from its origins in small lab experiments. Aspiring professionals in the field must now have strong technical skills, including coding and data science, to manage and interpret the huge datasets that are driving modern research.

Despite behavioral economics producing multiple Nobel laureates, undergraduate microeconomics textbooks remain fundamentally unchanged since the 1970s. This highlights a significant inertia within academia, where foundational curriculum often fails to incorporate revolutionary, field-altering discoveries even years after they are widely accepted.

Economic theory is built on the flawed premise of a rational, economically-motivated individual. Financial historian Russell Napier argues this ignores psychology, sociology, and politics, making financial history a better guide for investors. The theory's mathematical edifice crumbles without this core assumption.

Work by Kahneman and Tversky shows how human psychology deviates from rational choice theory. However, the deeper issue isn't our failure to adhere to the model, but that the model itself is a terrible guide for making meaningful decisions. The goal should not be to become a better calculator.

Post-WWII, economists pursued mathematical rigor by modeling human behavior as perfectly rational (i.e., 'maximizing'). This was a convenient simplification for building models, not an accurate depiction of how people actually make decisions, which are often messy and imperfect.

Contrary to popular belief, economists don't assume perfect rationality because they think people are flawless calculators. It's a simplifying assumption that makes models mathematically tractable. The goal is often to establish a theoretical benchmark, not to accurately describe psychological reality.

Milton Friedman's 'as if' defense of rational models—that people act 'as if' they are experts—is flawed. Predicting the behavior of an average golfer by modeling Tiger Woods is bound to fail. Models must account for the behavior of regular people, not just theoretical, hyper-rational experts.

Munger argued that academic psychology missed the most critical pattern: real-world irrationality stems from multiple psychological tendencies combining and reinforcing each other. This "Lollapalooza effect," not a single bias, explains extreme outcomes like the Milgram experiment and major business disasters.

Richard Thaler realized he couldn't convince his established peers of behavioral economics' merits. Instead, he focused on 'corrupting the youth' by creating a summer camp for top graduate students and writing accessible journal articles. This new generation then populated top universities and changed the field from within.